Murdoch Adds Germanys TM3 to Portfolio

Last summer, Murdoch announced that he was interested inmaking a major, new investment in Germany, leading most to speculate that he would try toincrease his 49.9 percent stake in music channel Vox.

However, his ambitions to take control of Vox were stymiedby the channel's co-shareholder, media company CLT-Ufa, which is controlled inGermany by Bertelsmann AG. Bertelsmann fears that if Murdoch gets control of Vox, itscompeting channel in Germany, RTL, would be hurt.

While Murdoch fights that battle, he has also opted toinvest in TM3, a money-losing channel with a tiny audience share. The size of the stakeand the price were not revealed when the deal was confirmed Nov. 8. However, sourcesindicated that Murdoch acquired a 66 percent stake in TM3 from its owner, TeleMünchen,for less than 100 million deutsche marks ($US60 million).

Early this year, rumors also circulated in Germany thatMurdoch was preparing to launch his Fox Kids channel in the country, possibly by takingover the failed Nickelodeon Germany channel, which shut down May 31.

Herbert Kloiber, owner of TeleMünchen, confirmed that someelement of children's programming will be introduced on TM3. But TM3 general managerJochen Kroehne said the channel won't be turned into a full children's channel.

"We had the idea ourselves to place children'sstuff during the daytime, in the slot in which we now run daily soaps," he said."This was decided some time ago, when Nickelodeon was shut down."

Specific news on the future programming plans of TM3probably won't come before the end of this month, when the next shareholder meetingis scheduled. Kloiber said he believes that an improved TM3 could achieve an audienceshare of 2.5 percent, and that it could break even by 2001.

TM3 has struggled, with an audience share of less than 1percent. Kloiber didn't say how much is invested in the channel, but its losses areestimated at DM250 million ($US150 million).

German sources indicated that Kloiber might be interestedin swapping his stake in RTL2 for CLT-Ufa's stake in Vox, which would be a way forhis new partner, Murdoch, to achieve control of Vox.